The university this year will begin preparing 87-year-old Memorial Stadium, which straddles the dangerous Hayward fault, for a $320 million renovation that is expected to make the football venue much safer. The upgrade is scheduled to finish in time for the 2012 football season.

University of California regents last week handed the Berkeley campus its final approval to go ahead with the project, completing a years-long planning process.

“I’m just so excited because it’s just one more step to be able to know that it’s going to be a reality,” said Cal football coach Jeff Tedford, whose team will play home games at either Candlestick Park, AT&T Park or the Oakland-Alameda County Coliseum during the 2011 season.

“It’s a big piece of the puzzle that’s been missing for a while,” he said. “It’s very exciting to know that it’s for real.”

The school will use a scheme with roots in the NFL to finance the project. The university will borrow the $320 million and pay it back over 30 years with the help of seat licenses, which fans buy for life and pay off annually.

The money raised by the licenses, a concept used by the National Football League, would collect interest in an endowment. Those profits — which university officials hope will outpace interest on the borrowed money — would pay off the loan if all goes as planned.

Although the plan poses some risk to the athletics department budget if profits are lower than expected, the bad economy means the timing is right, said Dave Rosselli, the university’s associate athletic director. And Cal has sold 60 percent of its 3,000 or so seat licenses, he said — right on target. The licenses start at $2,700.

“The good news is we’re going in when (the market is) down,” Rosselli said. “There’s so much upside potential.”

But potential may not be enough to quell concerns about the plan. The university already pumps millions into the athletics budget every year, a reality that has in the past year angered faculty members on a campus hit by deep budget cuts.

The plan also has skeptics off-campus, including Clemson University economist Raymond Sauer, a sports-finance expert who wondered whether seat licenses have the staying power to pay off the big loan.

“I think it’s just a bad time to be selling capital assets,” Sauer said. “I don’t really know if the concept is going to stay in the long run.”

Most agree the venerable stadium needs an overhaul to be safe enough for the 70,000-plus fans who crowd it on Saturday afternoons. The bowl’s capacity will decline to 62,717 after the renovation, which also will include significant cosmetic improvements to a facility that has seen better days.

“You can recognize the need,” said David Williford, an assistant athletic director at the University of Oregon who visits Memorial Stadium every two years with the school’s football team. “Facilities only last for so long.”

The university, which has been hit by lawsuits over development in the area surrounding the stadium, also could face more legal action from neighbors. The Panoramic Hill Association, a neighborhood group whose previous suit over construction plans for the southeastern corner of campus is pending appeal, is considering its next step, said association leader Mike Kelly.

“Certainly we support making the stadium a safer structure,” he said. “The concerns we have are about the impacts of the increased use of the stadium.”

But some at the university appear almost numb to the threat of more litigation.